2020 (8) TMI 922 - HC - GST

Violation of principles of natural justice - issuance of personal hearing notice even prior to the receipt of the explanation - non-application of mind - HELD THAT - A reading of the provisions of Section 75(4) of the Tamil Nadu Goods and Service Tax Act 2017 shows that after the explanation is received from the writ petitioners, the authority must apply their mind and if they contemplate an adverse decision, then they must provide an opportunity of hearing. Therefore, issuing a personal hearing notice even prior to the receipt of the explanation cannot be said to be compliance of the aforesaid statutory requirements. That stage would arise only after the authority prima facie considers the explanation and contemplates an adverse decision. Since there is a clear violation of the aforesaid requirement, the orders impugned in the writ petitions stand quashed and the writ petitions are allowed - The matters are remitted to the file of the respondents to pass orders afresh in accordance with law.

Summary

Issues: Violation of procedural requirements under Section 75(4) of the Tamil Nadu Goods and Service Tax Act 2017

Analysis:
The judgment delivered by the High Court of Madras addresses the issue of procedural compliance under Section 75(4) of the Tamil Nadu Goods and Service Tax Act 2017. The petitioners had submitted their replies to show cause notices on 29.02.2020, and the impugned orders were passed on 02.03.2020. The petitioners' counsel highlighted that Section 75(4) mandates granting an opportunity of hearing where an adverse decision is contemplated against the person chargeable with tax or penalty. The Court emphasized that the authority must apply their mind after receiving the explanation and provide an opportunity of hearing only if they contemplate an adverse decision. It was noted that issuing a personal hearing notice before considering the explanation does not comply with the statutory requirements.

The Court found a clear violation of the procedural requirement under Section 75(4) in this case. Consequently, the orders impugned in the writ petitions were quashed, and the writ petitions were allowed. The matters were remitted to the respondents for passing fresh orders in accordance with the law. The Court directed the respondents to issue a personal hearing notice to the petitioners before passing fresh orders. The judgment concluded by stating that no costs were to be awarded, and the connected miscellaneous petitions were closed.